Source · Select Committees · Public Accounts Committee
Twenty-Ninth Report - The Affordable Homes Programme since 2015
Public Accounts Committee
HC 684
Published 7 December 2022
Recommendations
2
Accepted
Housing providers do not always build in areas of higher demand.
Recommendation
Housing providers do not always build in areas of higher demand. There is a mismatch between where housing providers build compared to areas of highest need. The Department tells local authorities how many homes, not just affordable homes, they should …
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Government Response Summary
The government agrees to consider additional ways to work with LAs. The government will seek to improve this for successor programmes.
HM Treasury
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3
Rejected
We are concerned that the number of homes being built for social rent is not...
Recommendation
We are concerned that the number of homes being built for social rent is not enough to meet demand. There is huge demand for social rent homes which is the only real, affordable option for many people. Despite this, the …
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Government Response Summary
The government disagrees with the Committee’s recommendation to make an assessment of demand but will continue to maximise delivery of social rent through a mixed tenure programme and will work with the delivery agencies to confirm the 2021 programme’s capacity to deliver homes for Social Rent.
HM Treasury
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4
Deferred
The Department does not quantify potential savings in some areas, such as temporary accommodation, into...
Recommendation
The Department does not quantify potential savings in some areas, such as temporary accommodation, into the Programme. Surprisingly, the Department can identify, but not quantify, savings in areas such as temporary accommodation and adult social care that the public purse …
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Government Response Summary
The government will collect evidence through resident surveys as part of the 2021 programme evaluation to understand impacts for adult social care and temporary accommodation, with first results anticipated in 2024 and surveys repeating until 2029.
HM Treasury
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5
Acknowledged
New homes built under the Programme may need expensive retrofitting to meet net-zero standards in...
Recommendation
New homes built under the Programme may need expensive retrofitting to meet net-zero standards in the future. The Department did not set any standards around net-zero for the Programme and relies on housing providers to comply with relevant standards. This …
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Government Response Summary
The government agrees to set out the impact of including net-zero requirements in the next iteration of the Programme when ministers consider options for a successor programme; however, they note that the 2021 programme incorporated the National Model Design Code standard and that homes must meet existing and future building regulations.
HM Treasury
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6
Accepted
The Department does not publish satisfactory data on the type, tenure, size, quality, or location...
Recommendation
The Department does not publish satisfactory data on the type, tenure, size, quality, or location of homes built under the Programme. The Department does not, for example, publish data on the number of homes built, where they are built, what …
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Government Response Summary
The government will report annually to Parliament on the performance of the Programme and will confirm the information it will be able to share in its first report.
HM Treasury
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7
Deferred
The Department acknowledged that its section on risk within business case for the 2021 programme...
Recommendation
The Department acknowledged that its section on risk within business case for the 2021 programme may have been inadequate. We pressed the Department and Homes England over significant risks that may mean housing providers build fewer homes than forecast.11 The …
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Government Response Summary
The government will report to the Committee with updated targets for programme delivery following a review with Homes England and the Greater London Authority.
HM Treasury
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8
Accepted in Part
The Department specifies the overall number of homes (not just affordable homes) that local authorities...
Recommendation
The Department specifies the overall number of homes (not just affordable homes) that local authorities should build each year, through a calculation known as the ‘standard method’. Local authorities must follow this unless they have exceptional circumstances, and face penalties …
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Government Response Summary
The government will consider additional ways to work with Local Authorities to match delivery with local need, while highlighting existing mechanisms in place.
HM Treasury
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9
Accepted in Part
We challenged the Department about whether housing providers build homes where they are needed most.
Recommendation
We challenged the Department about whether housing providers build homes where they are needed most. The Department does not allocate funding from the Programme based on its calculation of local housing need.20 Under strategic bidding, housing providers only state the …
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Government Response Summary
The government agrees to consider additional ways to work with Local Authorities to match housing delivery with local need, including exploring giving greater control over the 2021 programme to the Greater Manchester Combined Authority and the West Midlands Combined Authority, and seeking to improve benefit cost ratio assessments for successor programmes.
HM Treasury
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10
Accepted
The Department told us it tried to ‘strike a balance,’ between a centrally driven approach...
Recommendation
The Department told us it tried to ‘strike a balance,’ between a centrally driven approach to need versus a local approach. The Department explained that outside London, Homes England identifies whether proposals for new homes are acceptable value for money, …
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Government Response Summary
The government agrees to consider additional ways to work with LAs to take greater account in the Programme of local need for affordable homes. The Department is exploring how to give greater control over the 2021 programme to the Greater Manchester Combined Authority and the West Midlands Combined Authority.
HM Treasury
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12
Rejected
Homes England told us that, under current plans, it forecasts achieving 14,300 homes for social...
Recommendation
Homes England told us that, under current plans, it forecasts achieving 14,300 homes for social rent under the 2016 programme, exceeding its target of 12,500 homes. For the 2021 programme, the Department told us it set a sub-target of 33,500 …
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Government Response Summary
The government disagrees with making an assessment of demand, but will continue to maximise delivery of social rent through a mixed tenure programme, and will confirm the 2021 programme’s capacity to deliver homes for Social Rent as part of a review.
HM Treasury
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14
Accepted
The National Audit Office report found that the Programme could bring greater value to other...
Recommendation
The National Audit Office report found that the Programme could bring greater value to other parts of government, for example, in reducing the numbers of people in temporary accommodation. Local authority spend on homelessness has increased 50% in real-terms from …
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Government Response Summary
The government will quantify wider savings to areas such as adult social care and temporary accommodation before the next iteration of the Programme, collecting evidence through resident surveys.
HM Treasury
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15
Accepted
The Department also commented that adult social care is another important example of the links...
Recommendation
The Department also commented that adult social care is another important example of the links and benefits that come from investing in housing, and that it is conducting research to quantify these savings.41 We asked the Department whether the 2021 …
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Government Response Summary
The government will collect evidence through resident surveys as part of the 2021 programme evaluation to understand the impacts of increasing affordable housing supply on areas such as adult social care and temporary accommodation, with first surveys in 2024 and repeating until 2029.
HM Treasury
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16
Accepted
We pressed the Department as to why it does not consider these wider savings when...
Recommendation
We pressed the Department as to why it does not consider these wider savings when it allocates funding through the Programme. The Department told us it is working on improving its research base to do so but contended that the …
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Government Response Summary
The government will quantify wider savings to areas such as adult social care and temporary accommodation before the next iteration of the Programme, collecting evidence through resident surveys.
HM Treasury
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17
Accepted
In contrast, the Department does consider welfare savings and quantified these in the 2021 programme...
Recommendation
In contrast, the Department does consider welfare savings and quantified these in the 2021 programme business case. The Department’s modelling showed that delivering new homes for social rent in London leads to significant savings in future housing benefit costs, compared …
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Government Response Summary
The government agrees to quantify the wider savings it could make to areas such as adult social care and temporary accommodation, before the next iteration of the Programme. The evaluation for the 2021 programme will collect evidence through resident surveys to help understand many of these impacts, with the first surveys in 2024.
HM Treasury
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19
Accepted in Part
The Department told us that it could have set higher standards from the outset for...
Recommendation
The Department told us that it could have set higher standards from the outset for net- zero, but that doing so would likely reduce the number of homes delivered. We challenged the Department on this assertion, because it had not …
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Government Response Summary
The government will explore the cost and deliverability of additional net zero requirements for a successor programme, while noting existing steps taken in the 2021 programme.
HM Treasury
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21
Accepted
The Department does not expect to deliver the intended benefits of the 2021 programme, and...
Recommendation
The Department does not expect to deliver the intended benefits of the 2021 programme, and there are significant risks that could mean housing providers build fewer homes than forecast.53 We asked the Department about whether it would be revising its …
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Government Response Summary
The government will share with Parliament a revised delivery plan for the 2021 programme. The government has asked Homes England and the Greater London Authority to work with their providers during Spring 2023 to confirm their programme commitments in light of new economic challenges to delivery and will report to the Committee with updated targets following the outcome of this review.
HM Treasury
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23
Accepted
We commented that it would be good if the Department transparently published data on the...
Recommendation
We commented that it would be good if the Department transparently published data on the tenure, area, and size of new homes.58 The NAO report used internal data from the Department, Homes England, and the Greater London Authority with regards …
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Government Response Summary
The government will provide an annual report to Parliament on programme delivery each year, once it has received final delivery figures for the financial year, and at the same point each year thereafter. The government will confirm the information it will be able to share in its first report.
HM Treasury
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Conclusions (6)
1
Conclusion
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Levelling Up, Housing & Communities (the Department) and Homes England about the Affordable Homes Programme.1
Government Response Summary
The government will work with Affordable Homes Programme delivery agencies to confirm their programme commitments in light of new economic challenges to delivery and will report to the Committee with updated targets for programme delivery.
11
Conclusion
Not Addressed
We asked the Department about the number of homes designated for social rent, given social rent is the most affordable for tenants; and the type of tenure most needed. We stressed the human impact that a lack of homes for social rent has. A lack of homes forces people to …
Government Response Summary
The government acknowledges the need for Social Rent homes and mentions existing policies, but disagrees with the recommendation to assess demand.
13
Conclusion
Not Addressed
We asked the Department about the potential impact of the proposed cap on social rents that it is currently consulting on. The rent cap could prevent housing providers from increasing rents by CPI + 1%, as envisaged.35 Business LDN warn that the Government’s proposed rent cap will leave housing providers …
Government Response Summary
The government acknowledges the need for Social Rent homes and mentions existing policies, but disagrees with the recommendation to assess demand.
18
Conclusion
Not Addressed
The Department did not set out to use the Programme to advance the government’s net zero objectives. The Department and Homes England did not include any specific targets around net-zero for the 2021 programme. Instead, housing providers must comply with existing and future environmental standards set out in the planning …
Government Response Summary
The government will explore the cost and deliverability of additional net zero requirements for a successor programme, while noting existing steps taken in the 2021 programme.
20
Conclusion
Not Addressed
The National Audit Office found that neither the Department nor Homes England modelled the potential costs of needing to retrofit homes built under the 2021 programme, to meet net zero standards.50 The Department said that the future homes standard, when it is introduced from 2025, will mean that homes after …
Government Response Summary
The government will explore the cost and deliverability of additional net zero requirements for a successor programme, while noting existing steps taken in the 2021 programme.
22
Conclusion
Acknowledged
The Department said that it thought the National Audit Office recommendation to annually update forecasts was useful and that it was a sensible thing for the Department to do.56 The NAO report had also noted that the Department accepted that it needed to make improvements around data and performance reporting, …
Government Response Summary
The government agrees to provide an annual report to Parliament on programme delivery, acknowledging that it doesn't currently hold all the data requested and will confirm what information it can share in its first report.